Generally speaking, “a debt consolidation loan is a good choice for people who do it for the right reasons,” says Green.
Usually those reasons include wanting to get out of debt or simplify your finances by reducing your number of payments.
The benefits of consolidation loans can be long-lasting, but they’re not foolproof.
If you’re consolidating debt just to borrow more, that is typically a bad move, says Green.
The people who do best with loan consolidation tend to be “people who are disciplined, people who are determined to pay down debt, and people who are willing to quit using credit as a crutch,” he says.
Because the interest rate on his consolidation loan is only 7 percent, Steve is also able to save on interest every month.
While it might sound counter intuitive to take out a new loan when you’re already juggling several debts, loan consolidation comes with notable benefits.
To find the best home equity loan for your needs, make sure to shop around with several lenders and compare terms, including the interest rate and length of the loan in your considerations. Balance transfer credit cards come in many different forms, but the best variations come with an introductory offer that is hard to beat.